Recovering SME loans – the best approach

Recent years have seen a huge increase in lending to small and medium-sized enterprises (SMEs), with governments and banks offering additional loans during the pandemic. Banks now face the challenge of recovering the money.

The approach banks will take varies depending on their circumstances and the profile of borrowers. A wide range of options can be deployed, from hiring additional collections professionals in-house, to third-party outsourcing, debt sale and carve outs of portfolios or parts of the business.


Upscaling existing operations is problematic, redirecting time, investment and other resources from the core business focus. It is difficult for in-house teams using legacy systems to match the efficiency needed with such high volumes.


Most will require additional third-party support. This has the advantage of immediately adding skilled professionals with access to leading technology to the recoveries effort, improving profitability and delivering an excellent customer service experience.

Debt sale

In addition, some banks may choose to combine third-party support with the sale of existing stock, removing defaulted loans from the balance sheet. This can be structured to provide ongoing servicing capabilities.

Carve out

A further step is to carve out the SME servicing unit from the bank. This allows the bank to pass the operation of complex collections to a specialist provider, while retaining some of the upside of improved performance and a servicing partner for future lending.


Ultimately, banks require partners with expertise who are prepared to take a bespoke approach. That may be through simply providing extra pairs of hands for a period of time, or through a combination of servicing, debt purchase and carve out capabilities.

As Europe’s leading credit management company, Intrum is a major servicer of SME loans. We are poised to support banks in finding solutions to their non-performing loans – from servicing to portfolio sale and carve outs. To talk to us about your requirements, contact us through the form below.

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